US tax dodgers pocket over $24 billion

A US federal investigation has found that thousands of companies that received stimulus funds owe the government hundreds of thousands of dollar in taxes.

A report by the Government Accountability Office found that at least 3,700 contractors and nonprofit groups that accepted federal stimulus money have not properly paid their taxes. In sum, the companies owed at least $757 million at the end of fiscal year 2009. However, it is likely that the number of companies and the monies owed it actually much higher.

“It is a matter of basic fairness that those who take government money should be required to pay their taxes like everyone else,” said Republican Senator Tom Coburn, ranking member of the Senate Permanent Subcommittee on Investigations. “That such a huge amount of the stimulus money went to known tax cheats should be a wake-up call for Congress.”

“We’ve known that a small percentage of federal contractors and grantees who get paid with taxpayer dollars shirk their responsibility to pay their taxes,” added Subcommittee Chairman and Democratic Senator Carl Levin, noting that serious action must be taken against delinquent companies.

The report found that the companies owed at least $417 million in corporate taxes and at least another $207 million in federal payroll taxes.

“The executive branch has made it clear nonpayment of tax can be grounds for denying a specific contract or debarring a contractor from bidding on any contract,” Levin said. “Now the executive branch should get on with it and actually debar the worst of the tax cheats from the contractor workforce.”

“Companies that want federal contracts are now required to certify whether they have a significant tax delinquency and that requirement is deterring tax delinquents from getting federal contracts,” said Moira Mack, a spokeswoman for the Office of Management and Budget. “These efforts are consistent with the steps this administration has taken through the Recovery Act to provide an unprecedented level of accountability and transparency on behalf of the American taxpayer.”

Many Republicans, who opposed the stimulus programs, in the first place, took the report as evidence the stimulus program was both a mistake and a failure.

“This shows how fundamentally flawed the failed stimulus has turned out to be when Washington jams through almost a trillion dollars in spending with little scrutiny,” Republican Senator Orrin Hatch, ranking member on the Senate Finance Committee, told AP.